NAFTA Update: January 9, 2018
Negotiations Continue at the End of January
After a long hiatus, NAFTA negotiations will officially resume with the sixth round from January 23 to 28 in Montreal. In between rounds, officials from the three countries gathered in Washington to learn more about each other’s priorities and to bring less-controversial chapters closer to completion.
Overall, the outlook for NAFTA is bleak, with many experts discussing the impacts of an unsuccessful negotiation. They expect that termination of the agreement would lead to worsening of exchange rates, costs to retailers of as much as $21 billion per year, loss of competitiveness in North America, and a reduction of Canada’s GDP. However, commentators generally agree that while the impact will be significant, it will be manageable, especially if Canada successfully diversifies its trading partners.
The House Committee on International Trade released a report on Priorities of Canadian Stakeholders Having an Interest in Bilateral and Trilateral Trade in North America, Between Canada, the United States and Mexico. This report, released in December, contained 28 recommendations that were consistent with previously identified Canadian priorities. Emphasis remains on increasing American awareness of the significance of the Canada-U.S. trading relationship. According to the report, the overall Canadian goals for negotiations are increasing exports by Canada’s businesses, increasing wages, and reducing income and wealth inequality.
With U.S. midterm elections and the Mexican presidential election approaching, it is important that progress is made in negotiations at the end of the month.